CBDCs are a grave danger to core liberties in the US

Research from the Cato Institute claims that a central bank digital currency (CBDC) produced by the United States government, would take over the private sector and undermine people’s privacy and fundamental liberties.

The federal government is studying the introduction of a CBDC, which would be a digital dollar backed by the Federal Reserve. According to the Cato Institute, a Washington, D.C.-based think tank that conducts policy research, this poses a clear and present threat to citizen privacy and the free market.

In the report’s conclusion, the institute did not mince words, declaring that CBDCs “should have no place in the American economy” and that “Congress should officially ban the Federal Reserve and the Department of the Treasury from issuing any kind of CBDC.”

According to the Cato Institute, the key arguments against the construction of a government-issued CBDC include concerns regarding surveillance and control, the stability of the free market, and cybersecurity.

“The private sector is not immune, but it has the distinct advantage of being more decentralized than the federal government,” write the report’s authors. “Whereas a breach at the Internal Revenue Service puts all 333 million Americans at risk, a breach at a private financial institution would only affect a fraction of citizens.”

The Federal Reserve estimates that over sixty percent of worldwide financial obligations and claims are denominated in U.S. dollars therefore  these privacy issues may extend outside the United States.

It is still unknown whether and when the United States will issue a CBDC; nevertheless, the Federal Reserve’s FedNow service, a state-run quick transaction banking facility, is planned to launch in July.

According to prior reports, the current debates on Capitol Hill continue to be a contentious matter for some, with Congressman and Republican Party majority whip Tom Emmer labeling CBDCs as potentially “hazardous” for both individual users and the government’s political opponents.